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How ISO 20022 Represents Both a Challenge and an Opportunity for Southeast Asia’s Payments Landscape

That is not to say that the situation is the same across SEA – every country is at a different stage of adoption. However, in the worst-case scenario, financial institutions that aren’t ready to migrate to ISO 20022 may find themselves excluded from payments networks.

This is becoming an increasingly urgent issue as the data-rich ISO 20022 standard intersects with another growing trend: the use of machine learning and artificial intelligence in a broad range of financial services.

In this blog post, I’d like to provide a quick overview of why regulatory bodies around the world are pushing for financial institutions to migrate to ISO 20022, as well as insights into the state of adoption for specific countries across SEA, before finally discussing how financial institutions should be looking to make their own transitions.

The case for ISO 20022

The ISO 20022 messaging architecture has thousands of data fields, making it significantly more data rich than previous standards. Allowing additional information to be attached to payment messages improves payments efficiency and creates a common and level playing field, facilitating interoperability between different IP schemes across borders. This will open the door to consolidation of systems and associated cost reductions, but also the creation of new services that bridge previously disparate payment systems.

The breadth and depth of the data also makes the ISO 20022 standard a natural fit for machine learning and artificial intelligence, which are built on data. Through the use of machine learning, predictive models can be developed to run millions of fraud checks in the span of a few seconds, swiftly and automatically identifying legitimate transactions – this is done by comparing transactions to a customer’s purchase history and isolates potentially fraudulent ones with greater accuracy. As part of a multi-layered approach to fraud detection, this ensures that such checks do not impede the shopping journey of real customers, resulting in a significantly better customer experience and fostering greater customer loyalty. This will be key in setting them apart from other payment players.

SEA levels are rising, but at different rates

As I mentioned above, the state of ISO 20022 adoption differs from country to country, even within the SEA region. To ensure that their organizations are ready to capture relevant ISO 20022-related strategic opportunities, as well as be ready to join any regional payments network, it is important for business leaders to understand the nuances to each country. Here are a few key country-level insights from ACI Worldwide’s recent Prime Time for Real-Time report:


  • Thailand’s market is something of a “perfect storm” for IP adoption — as evidenced by the speed at which Thai consumers have taken to IP usage through digital overlay services such as PromptPay, which leverages an alias database to enable P2P, P2C and C2B payments via email, phone or ID number. This is a successful first-wave result for the Thai government’s Financial Services Master Plan for payments modernization.
  • Thailand can also drive IP further by moving its scheme to the ISO 20022 messaging format, as this will provide more IP capabilities and improve interoperability, all of which is essential to continuing the upward trajectory of transaction volumes.


  • The centrally-driven mandate approach to making all banks ISO 20022-compliant on a unified connector or gateway was instrumental in driving up transaction volumes from day one. This accelerated time to revenue compared to other payment schemes, which have experienced a longer time to “ramp up,” was made possible through collaboration with ACI on the right solution to quickly onboard the participants.
  • Malaysia is also in the process of adding a consent management platform for debits, credit transfer capabilities, eKYC digital ID compatibility and real-time debit capabilities. Malaysia is also adding cross-border payments with ASEAN IP schemes such as PromptPay and NETS, enabling accessibility to the above through APIs. There is still plenty of growth yet to materialize in Malaysia.


  • Singapore has already seen impressive IP growth, but there are certainly factors that might drive this further. Historically, a lack of central bank mandate has kept PayNow membership to a limited group, and understandably this has impacted on transaction volumes. Lack of mandate can also lead to inconsistency in availability of services across the banks and financial institutions, which inhibits the development of a rich ecosystem of fintechs and integrated services – this still needs to be addressed.

Making the migration easier

Given the complexity involved in migrating to ISO 20022, the key trick to meeting migration deadlines is to work with a partner that can provide ISO 20022-native solutions, delivered with technical expertise and causing minimal disruption. Integration into non-ISO systems and the canonical orchestration of messages to provide a pathway to full real-time operations are also key aspects of a comprehensive migration journey.

Compliance with various deadlines from regulatory bodies, no matter where in SEA the financial institution operates, also needs to be balanced against the need to map out an organization’s own smooth, controlled and low-risk timeline for migration.

Done right, the process of ISO 20022 migration can also be transformed into a business opportunity, creating a more agile payments environment and helping banks compete more effectively – over the next decade and beyond.


Contact us to speak to one of our experts about how ISO 20022 can be turned into a business opportunity for SEA financial institutions.

Director – Southeast Asia

Mark helps banks and financial intermediaries across Southeast Asia to navigate the shifting payments landscape, providing solutions to modernize the payments infrastructure for customers and finding new revenue streams in a competitive fintech environment. Throughout his career, Mark has directed numerous client engagements, ranging from defining strategy through to systems integration and implementation. Prior to ACI Worldwide, Mark worked for multiple global companies providing solutions to corporate banks – delivering core banking, risk and compliance, transaction banking and payments solutions. Outside of work, Mark takes part in long-distance triathlons. He holds a Computer Science degree from the Royal Melbourne Institute of Technology.